Despite the acquisition of Spanish streaming media company Wuaki.tv and Viber (Israeli founded VOIP instant messaging company) and plenty of noise in the Japanese media about forcing employees to speak English, Rakuten’s profile in Europe seems pretty low to me, considering it’s the ‘world’s 3rd largest e-commerce company’.
Indeed, according to Nikkei Business, only 14% of its revenues are from outside Japan and it seems is not very profitable either. Japanese domestic business – the so-called ‘Rakuten economic bloc’ of e-commerce, travel, banking and e-publishing – makes up the bulk of Rakuten’s business.
To charges that Rakuten’s business model does not work outside Japan, the founder Hiroshi Mikitani counters that he has only just assembled the ingredients for overseas success and that the first market in which he has started “cooking” is Taiwan. He is hoping to learn from the experience to speed up overseas expansion.
It’s five years since Mikitani announced that the corporate language would be English, attracting much scepticism in Japan. “If we had not done that 5 years ago, we would not be the company we are today” says the Global HR GM Koichi Noda. Japanese, Chinese and English flow around the canteen, and when different nationalities sit together, they naturally converse in English.
Mikitani’s recurring comment “Easy English is OK”, to Japanese struggling to present in English, must have helped overcome the Japanese perfectionist attitude to using English, as well as allowing people to attend English lessons during working hours. The average TOEIC score of Japan based Rakuten staff has risen from 526 in 2010 to over 800 in 2015.
As the Nikkei says, this has ensured that when overseas acquisitions join the family, other employees besides the person who led the acquisition can now converse with the new subsidiary. Indeed, this is often the frustration of the local and expatriate executives of overseas acquisitions I have worked with, that the number of people in Japan HQ who could happily join a global conference call to improve communication flows is very limited.
The next phase of “Englishnization” as Mikitani calls it, is to improve conversation and presentation skills. Just speaking English does not make you a global person, Noda agrees. The second phase is intended to enable employees to negotiate and debate and will be using Pearson’s Versant testing rather than TOIEC as a measure. The third phase is the Global Experience Program – whereby 100 or so Japan based employees spend half a year to a year overseas.
All very laudable, and I imagine there plenty of longer established Japanese companies who wish they could get away with doing something similar.
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